Research Administration Office

University of California

No. 11-77

January 26, 1977

I-2. Allowability of Charging Administrative Stipends to Federal Research Contracts and Grants

Attachment No. 1 is a January 3, 1976 memorandum from the Chief of Costing Studies to the Manager, Contracts and Grants, interpreting federal costing guidelines concerning the payment of administrative stipends under Federal research projects. The issue had been raised on the Los Angeles campus in connection with the administration of its Cancer Center Core grant. (Refer to Attachment No. 2 and 2a)

The Chief of Costing Studies' interpretation of FMC 73-8 costing guidelines is that administrative stipends can be an allowable cost to a Federal project in those instances wherein: (a) the terms and conditions of the award permit such a charge; and (b) benefit of the services provided by the recipient can be directly identified with the project concerned.

Furthermore, the University policy guidelines governing the payment of administrative stipends determined to be allowable under a Federal research project (refer to the November 24, 1976 memorandum from the Vice President--Academic and Staff Personnel Relations, Attachment No. 3) are set forth as follows:

(l) administrative stipends should only be paid in those instances wherein the recipient is clearly receiving the stipend for the performance of administrative duties;

2) the recipient holds an administrative title for which a stipend is permitted; and

3) the administrative appointment has been assigned a specific percentage of time.

Refer: W. Archie, 2-2593

Index: Cost Allowability, Performance and Obligations under Contracts

and Grants


Vice President--Business and Finance

January 3, 1976

RICHARD D. WOLFE

Subject: Allowability of Charging Administrative Stipends to Research Contracts and Grants

By a memorandum of July 8, 1976, Director Feuerborn of the Los

Angeles campus requested guidance regarding the allowability and

desirability of charging administrative stipends to contracts and grants for research. He sought guidance on both a general basis

and the specific instance wherein faculty members of the Schools of Medicine and Nursing have been designated as Assistant and Associate Directors of the Cancer Center. The latter activity was identified as functioning in many ways as an organized research unit, but not officially designated as such.

Under our interpretation of Federal costing guidelines (i.e. GSA Financial Management Circular 73-8), administrative stipends can be an allowable cost to a Federal project in those instances wherein: (a) the terms and conditions of the award permit such a charge; and (b) benefit of the services provided by the recipient can be directly identified with the project concerned. These requirements would rule out charging administrative stipends to most research projects in that they are normally paid to academic administrators such as deans, department chairpersons, and directors of organized research units for assuming administrative responsibilities which provide common or joint benefit to all of the activities of the organizational unit concerned and are accordingly included in the University's indirect cost rate. Examples wherein administrative stipends could be appropriately charged directly to a Federal project would include: (a) institutional support type grants where the purpose of the award is sufficiently broad to embrace charges for indirect administration; and (b) a Federal project of such magnitude that the benefit of the administrative stipend can readily be identified, quantified, and substantiated for purposes of audit.

Coordination with Vice President Kleingartner reveals that University academic personnel policies do not preclude charging administrative stipends to sponsored projects. However, care must he exercised that such payments meet the general criteria regarding administrative stipends that: (a) they should only be paid in those instances wherein the recipient is clearly receiving the stipend for the performance of administrative duties; (b) the recipient holds an administrative title for which a stipend is permitted; and (c) the administrative appointment has been assigned a specific percentage of time. Deviations from the latter criteria are permissible in unusual situations wherein, for example, the administrative appointment is of relatively short duration, or the percentage of time involved is relatively minor.

Chief, Costing Studies

cc: Vice President Kleingartner


MR. RICHARD D. WOLFE:

July 8, 1976

SUBJECT: Allowability of Charging Administrative Stipends to Research Contracts and Grants

A question has been raised on this campus concerning the allowability of charging administrative stipends to a Public Health Service grant. Generally speaking, it has not been the policy of this campus to charge administrative. stipends to a contract or grant, but there have been a few exceptions in connection with AID funded projects. In any case, there is no written policy concerning this matter.

We would like to have your office review this issue and provide us with any comments which you may have. Enclosed for your information is a copy of the principal investigator's memo which requested that we look into this matter.

I think our question is really two-fold, 1) generally, can administrative stipends be charged to a research contract or grant and 2) specifically, can administrative stipends be charged to the grant referred to in the enclosed memo, the UCLA Cancer Center grant? If it is technically possible is it a good idea for the University to begin such a practice? Under what circumstances?

The UCLA Cancer Center is funded totally by a "Core" grant (No. CA-16042) from the Public Health Service. The purpose of this grant is "to provide a mechanism to support those elements of a cancer center that are required for the planning, development, evaluation, administration, and maintenance of an active and unified cancer center in order to consolidate and focus cancer-related activities in a single administrative and programmatic structure. Through this mechanism, support may be provided which can contribute to the stability of the center, to administrative and programmatic control of center activities, and to fiscal accountability and responsibility." The grant provides support for professional staff, centralized services and resources. and shared equipment and development projects. In many ways, the Cancer Center functions as an organized research unit but is not officially designated as such.

The Cancer Center Executive Committee, referred to in the enclosed memo, consists of a number of faculty members designated as Assistant and Associate Directors of the Cancer Center. Their principal function is to advise the Director on major policy decisions relevant to the operation of the Cancer Center. In addition to this role, they each head their own committees with responsibility for specific Cancer Center programs, e.g. review and approval of "seed-grant" proposals, space planning, education, etc. They presently receive a stipend from the UCLA School of Medicine for their effort on behalf of the Center.

If I can provide you with any additional information, or if you have any questions, please let me know.

Sincerely,

Terence A. Feuerborn Director

Enclosure

cc: Mr. Philip E. Costic


Terence Feuerborn

Director, Office of Contract & Grant Administration

Director, UCLA Cancer Center

Administrative stipends for Executive Staff of the Cancer Center

Dear Mr. Feuerborn,

As we discussed over the telephone, the School of Medicine has been paying approved administrative stipends for several individuals on the Cancer Center Executive Staff. We were advised originally that the

Cancer Center core grant could not be used to pay for these administrative stipends, a].though the sole justification for the added salary was the services being performed for the Cancer Center by these' two 'or three individuals. I would very much appreciate a definitive judgment on this question: can the Cancer Center core grant be used to pay for modest stipends for two or perhaps three individuals who are key members of the Executive Staff, providing that the stipends are approved by University Administration.

Thanks very much for your help.

cc: Associate Dean A.F. Rasmussen, Jr.

Mr. Philip Costic


Office of the Vice President

Academic and Staff Personnel Relations

BERKELEY, CALIFORNIA 94720

November 24, 1976

MAX R. CONNELLY:

On the matter of "Allowability of Charging Administrative Stipends to Research-Contracts and Grants," and whether there are any academic personnel policies which would preclude such payments, I am of the opinion that there are no such prohibitions. Of course, it should be stressed to Los Angeles that if the campus administration is willing to approve such stipends, they should be paid only in instances of clear administrative responsibility in an administrative title for which a stipend would be permitted. May I also suggest that the administrative appointment should normally be assigned a specific percentage of time.

I am sorry that my written response to your question "dropped between the chairs." I did discuss this with my staff in late July or early August, and I understand that Ms. McLaughlin had verbally relayed the essence of this response to Mr. Davis of your staff.

Sincerely,

Vice President